Shedeshi Liquor's e-commerce channel revenue is expected to significantly increase by 2025, demonstrating a firm commitment to the vintage liquor strategy to navigate industry cycles.

How does AI and the old wine strategy support Shede Spirits in overcoming industry downturns?

Recently, Shede Spirits (600702.SH) released its 2025 performance report, achieving an annual revenue of 4.419 billion yuan and a net profit of 223 million yuan attributable to shareholders. Despite the overall industry pressure, the company’s revenue and net profit declines narrowed compared to the previous year, showing signs of recovery and improvement in its operating fundamentals.

The company also announced its profit distribution plan, proposing a cash dividend of 3.10 yuan per 10 shares (tax included), totaling 102 million yuan in cash dividends, with a payout ratio of 45.67%, up from 40.91% last year, continuously strengthening shareholder returns with real cash.

In 2025, the liquor industry enters a period of deep adjustment characterized by consumption structure transformation, market segmentation intensification, and fierce competition over existing market share. Facing external pressures, Shede Spirits leverages its forward-looking layout, actively promotes volume control and price support, and reduces inventory. By focusing on product innovation, channel optimization, and operational improvement, the company continues to strengthen its operating foundation.

The company’s sustainable development capability has also been recognized by the capital market, with the S&P ESG score increasing by 73% year-over-year, and receiving multiple honors such as the “Guoxin Cup ESG Golden Bull Award” and the “Top 100 Chinese Enterprises ESG in 2025.”

Proactively Breaking Through Industry Pressure and Continuously Strengthening Operating Foundations

During the reporting period, Shede Spirits optimized all key operational indicators, with a more distinct and stable operating foundation: in 2025, net cash flow from operating activities significantly improved compared to the previous year, further enhancing core business profitability; revenue and net profit declines narrowed, showing clear recovery trends; operating costs decreased by 9.18% year-over-year, while sales and management expenses fell by 10.68% and 12.39%, respectively, demonstrating significant cost reduction and efficiency gains; additionally, as of the end of the reporting period, total assets increased by 6.89% to 12.615 billion yuan, laying a solid foundation for future market expansion, capacity layout, and strategic implementation.

Looking at product categories, Shede Spirits’ sales revenue from regular liquor increased by 5.75% year-over-year to 733 million yuan. Among them, the strategic flagship product TuoPai T-68, known for its high quality and cost performance, achieved rapid growth in key indicators such as terminal sales, bottle opening rate, and shelf placement rate, maintaining its market base.

In channel deployment, the company has strengthened online and offline synergy, with e-commerce becoming a new growth engine. In 2025, e-commerce sales reached 604 million yuan, a 35.46% increase year-over-year. Over the past year, Shede Spirits has successively formed strategic partnerships with JD.com and Meituan Flash Purchase, consolidating traditional e-commerce platforms while actively expanding new channels such as live streaming and instant retail. Meanwhile, the company continues to deepen offline channel penetration, adding tens of thousands of new partner stores in KA channels, continuously enhancing terminal reach. Additionally, the company accelerates overseas market expansion, with operations now in 42 countries and regions and nearly 100 duty-free stores.

Regarding capacity layout, in response to the trend of industry concentration on famous wines and the increasing demand for high-quality aged liquor, expanding capacity remains strategically necessary: on one hand, the core barrier of aged liquor lies in time accumulation, and proactively expanding capacity can provide sufficient base liquor reserves for the next 5-10 years; on the other hand, ample capacity supports the company’s multi-brand strategy and expansion into domestic and international markets, securing growth opportunities after industry recovery.

“Aged Liquor + Culture” Dual-Drive Demonstrates Long-term Commitment

The steady performance of Shede Spirits in 2025 stems from its intense focus on the “aged liquor strategy,” with long-term efforts in quality, product innovation, and brand building.

In terms of quality, Shede Spirits’ brewing process has been recognized as a “National Intangible Cultural Heritage,” achieving zero defects in high-quality base liquor production through precise control of each process. The company’s reserve of over 100,000 tons of aged liquor is a rare core asset in the industry, providing confidence for its commitment to extreme value-for-money and product innovation.

On the product side, the company adopts a dual-track strategy of “core flagship products maintaining the base and innovative products contributing incremental growth,” building a more resilient product matrix. For example, the core strategic product Shede 10-year collection remains stable in price, with channel inventory continuously cleared; sales of Shede’s “Dao” series have doubled, and the Shede Celebrations series has seen sales double as well. Meanwhile, the company responds to changing consumer demands by continuously pushing for innovation in aged liquor products.

In light of current trends toward lower alcohol content, more palatable, and multi-scenario consumption in the white liquor market, Shede Spirits leverages its aged liquor quality heritage to launch the industry’s first low-alcohol, easy-drinking aged liquor, “Shede Zizai.” This product breaks the traditional perception that low-alcohol spirits are bland, leading the premium white liquor segment from “simply lowering alcohol content” to “upgrading quality.” Launched just four months ago, it has won seven awards, been distributed in over a thousand outlets, and opened new market segments.

Notably, Ma Dong has become the brand ambassador for Shede Zizai. His cross-generational appeal aligns with the product’s qualities of “authentic aged liquor, high value-for-money, and light flavor,” precisely addressing the needs of a new generation of businesspeople who seek social quality without the constraints of traditional drinking rules. This partnership is a strategic positioning for Shede Spirits in the “light business” scene. As younger business professionals prefer more equal and relaxed communication styles, traditional business banquets are undergoing a rule reshuffle. Ma Dong and his IP matrix promote “equal dialogue” and “intelligent thinking,” helping Shede Zizai establish a strong association with the “light business era” in consumers’ minds, opening up more possibilities.

Additionally, Shede Spirits has launched youthful products such as “Shede in a Box” mini liquor blind boxes and the 24 Solar Terms cultural series, blending traditional culture with trendy consumption scenarios, further expanding the young consumer base for aged liquor and modernizing the category.

On the branding front, the company actively promotes the “Aged Liquor + Culture” concept to build a distinctive brand identity. As an industry leader in cultural marketing, Shede Spirits has continuously refined its “Shede Wisdom Figures” IP, now in its seventh season, engaging with elites across various fields to tell the “Shede” story and create a highly recognizable cultural communication platform. The company also hosts offline cultural events such as the Aged Liquor Festival, revitalizing the brand slogan “This era needs Shede,” shifting from one-way communication to emotional resonance and value sharing with consumers. Its international influence is also growing, with the Shede Aged Liquor Festival held in multiple countries and regions, and the Tuopai intangible cultural heritage brewing techniques showcased at UNESCO headquarters, conveying Chinese white liquor’s cultural value globally.

From building a quality moat for aged liquor, creating a differentiated product matrix, to establishing a “quality + Shede culture” brand perception, Shede Spirits has achieved a leap from category leadership to value leadership. According to the World Brand Lab’s 2025 “China Top 500 Most Valuable Brands,” the “Shede” brand is valued at 110.872 billion yuan, and the “Tuopai” brand at 79.826 billion yuan, with both brands exceeding 190 billion yuan in total value.

Strong Momentum at the Start of 2026 Signals Positive Development

Entering 2026, Shede Spirits begins the year with a strong performance. During the Spring Festival peak season, all product lines sold well, terminal inventories accelerated their optimization, and bottle opening rates maintained double-digit growth.

With the upcoming 2026 Spring Liquor and Food Fair, Shede Spirits has taken proactive steps to enhance brand momentum: hosting the fifth Aged Liquor Festival with innovative interactive formats to deepen consumer appreciation of aged liquor value and boost channel confidence; and becoming the strategic partner and sole designated white liquor at the 2026 Yabuli China Entrepreneurs Forum. With its rich cultural heritage and excellent aged liquor quality, it has gained widespread recognition among participating entrepreneurs, further strengthening its influence in the high-end business circle.

At the 2026 annual work conference, Shede Spirits clarified its development goals for the year, emphasizing “strengthening the foundation, breaking through, and starting anew.” The company will steadfastly advance four key strategies: “Aged Liquor, Multi-Brand Matrix, Youthfulness, and Internationalization,” continuously enhancing product strength, brand influence, channel reach, and organizational capabilities, to ensure resilience through cycles.

Guotai Haitong Securities analysts note that the adjustment period in the white liquor industry is now over halfway. As consumption gradually recovers, inventories are reduced, and base levels are low, the sector’s performance is expected to bottom out and rebound. With its forward-looking layout and strategic resolve, Shede Spirits is well-positioned to seize opportunities during the industry’s recovery, further consolidating its differentiated advantages and achieving high-quality sustainable growth.